It has been a busy Q3 for Canadian Apartment Properties REIT (CAR-UN-T). The trust has transacted on $214 million in acquisitions and $82.4 million in divestments as it continues upgrading and modernizing its apartment portfolio across the country.

CAPREIT has closed on or entered agreements to acquire five properties in the Vancouver, Montreal, Regina and London, Ont., markets since the end of June. It has also sold assets in Edmonton and in London, Ont.

“We’re proud to see these transactions bring us to $366 million of investment into the Canadian housing market so far in 2025, which we’ve effectively funded through $357 million worth of our non-core dispositions in Canada,” Mark Kenney, CAPREIT’s president and CEO, said in the announcement late Wednesday. 

"We’re trading properties that have low cash flow yields and high operational challenges, for premium rental apartments located in widely sought-after, top-tier neighbourhoods within Canada’s most attractive cities.

“Through this repositioning strategy, we’re enhancing the quality of our portfolio, cash flow profile and long-run earnings for unitholders, while also infusing capital and supporting affordable housing in the market, which importantly benefits the broader residential real estate landscape in Canada.”

Properties being acquired by CAPREIT

The acquisition properties are:

• The lowrise Sterling Manor in the Greens on Gardiner neighbourhood in Regina, which had been developed by Devereaux Group. Built in 2014 and containing 320 apartments, it offers nearby access to transit, schools, parks, shopping and a newly opened road bypass. The property boasts large average suite sizes with contemporary finishes, and a range of amenities including an outdoor pool, fitness centre, games room, community fire pit and barbecue area. The $76.3 million purchase price includes $37.3 million in mortgages, at a blended rate of 2.1 per cent per annum for a remaining weighted average term of approximately six years. Closing is anticipated by the end of September.
• A total of 162 residential townhome suites known as Uppershore and Riverbend, built in 2012 and 2015 in London by Legacy Homes. The suburban location is near Riverbend Park, Kains Woods trails, schools, shopping, dining and golf facilities. CAPREIT will pay $56.2 million for the properties, assuming $24.0 million in mortgages at a blended rate of three per cent with a remaining term of approximately four years. Closing is anticipated in October.

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  In July, CAPREIT acquired the 30-suite Hollyhill Towers rental property in West Vancouver, which had been owned for decades by Lantern Properties. This allowed the trust to expand into the most affluent municipality in Canada (average household net worth in excess of $4 million) where there is limited new construction and supply. The property was purchased for $13 million and CAPREIT assumed a $6.1 million mortgage at 4.1 per cent per annum with an eight-year term.
• In August, CAPREIT closed on AVA, a 10-storey building containing 121 premium residential suites in Montréal. It was developed by Mondev, and put on the market earlier this year. Located in Côte-des-Neiges-Notre-Dame-De-Grâce, it is surrounded by a dense retail offering east of Highway 15, and a short walk from De la Savane and Namur metro stations. The amenity-rich property includes a rooftop pool, fully equipped gym, indoor lounge and outdoor terrace. It was completed in 2024 and was purchased unencumbered for $54.5 million.
• In September, the 31-suite Twelve81 apartment building was purchased in Vancouver’s trophy West End neighbourhood from Reliance Properties. Located near the Central Business District, Sunset Beach and Stanley Park, it is also situated adjacent to another recent CAPREIT acquisition. Twelve81 was acquired for $14 million, and CAPREIT assumed a $5.8 million mortgage (4.2 per cent interest rate, remaining four-year term).

CAPREIT's recycling strategy

“Our strategy is focused on recycling capital into high-quality, high-performing properties situated in high-demand areas that have strong long-term growth prospects,” Julian Schonfeldt, CAPREIT’s chief investment officer, added in the announcement. “These transactions demonstrate how we’re able to improve our portfolio quality while enhancing cash flow. 

“As an example, the acquisition of the recently constructed Sterling Manor is at a slightly higher capitalization rate than the sale of the 60-year-old Garneau Towers, which improves net operating income, but importantly, with a fraction of the capex requirement, and a noticeable upgrade to CAPREIT’s portfolio quality. Additionally, Garneau Towers was unencumbered, whereas Sterling Manor has attractive below-market debt.

“We’re excited to continue recycling our capital in this productive manner, improving our performance and growing cash flow for unitholders through executing on this tried-and-tested repositioning strategy, and we look forward to making further progress in 2025.”

CAPREIT’s two divestments both closed in August:

• The Chelsea Manor residential property with 59 suites built in 1970 in London was sold for $11.8 million, with part of the net proceeds used to repay the outstanding $4.3 million mortgage.
• The Garneau Towers in Edmonton, containing 309 residential suites, constructed in 1965, was sold for $70.7 million. It was sold unencumbered.

About CAPREIT

Toronto-based CAPREIT is Canada's largest publicly traded provider of rental housing.

As at June 30, CAPREIT owned approximately 45,400 (excluding approximately 1,600 suites classified as assets held for sale) residential apartment suites and townhomes across Canada and the Netherlands, with a total value of approximately $14.5 billion (excluding approximately $0.6 billion of assets held for sale).